8 Sales Negotiation Strategies To Close More Deals

8 Sales Negotiation Strategies To Close More Deals

Imagine you get a wretched last-minute email from a potential client who was on the brink of signing a sales contract. It highlights a few price-related or other issues they want to discuss at length. 

While this may seem like a setback, don’t lose heart yet! Instead, prep yourself for a sales negotiation. 

If you have been in sales for a substantial amount of time, the above scenario won’t be too alien for you. Your organization would probably expect you to conduct successful negotiations from time to time. So, whether you’re new to the art of negotiating or a primed player, it never hurts to hone your skills further. 

Outline:

Often clients have their negotiation experts. And, while trying to close a deal, you’ll come across a point-of-contact on the other side willing to bargain on not just the project cost but also the scope and the number of deliverables. 

When you do, here are a few tactics to help you stay prepared and direct negotiations in your favor.

1. Negotiate with influencers and decision-makers

Studies reveal that a whopping 92% of decision-makers read unsolicited emails. But, before you learn “how” to negotiate, it’s critical to know “who” to mediate with. After all, there isn’t much point in reaching an understanding with someone who doesn’t have any real say in the decision-making process. 

Negotiate with influencers and decision-makers
Source: Connect 365

We know this may sound like an obvious tip, but even then, some sales professionals end up negotiating with the wrong executive. And, by the time they identify and talk to a decision-maker, they start negotiation with a discounted price quoted in the first meeting while talking to a junior executive. 

So, whether via email or in-person, be careful about stating your price or laying out your scope of work and deliverables in front of the wrong person. Once these specifics are out, you will most likely be unable to backtrack when negotiating with a key influencer.  

2. Probe the prospect by letting them speak first

A big part of being an effective negotiator is to simply react to what your prospect is saying and scooch tidbits of valuable information in between. Letting them speak first can help you identify the underlying challenges customers have. 

Often in the hustle to sell, salespeople end up offering discounts or broadening the scope of work before hearing the potential customers’ side. But, maybe the problem was not price-related at all! You can’t know for sure until you let them take the lead.  

Probe the prospect by letting them speak first

While it pays to listen, if you’re faced with a situation where the client asks for a discount and has no counter price in mind, you will have to come up with one. In such a scenario, always negotiate to protect your margins. Even before the negotiation starts, have two or three prices pre-approved and quote them one by one. 

After the prospect hears your final offer, they may quote a price even lower than your lowest slab. Don’t fold your cards yet to seal the deal if you don’t have approval for the client-quoted price. Keep them on the hook by asking permission to get back within 24 hours – always provide a timeline, and stick to it. 

Within this deadline, seek the opinion of your seniors, revert to the client by either saying yes to their offer or going slightly above, and then await their response. 

Lastly, keep in mind that negotiators end up recalling only 50% of what their counterpart said, so if possible, take extensive notes or get a colleague to help you. Doing this ensures you don’t miss out on any vital piece of information the prospect said.  

3. Quote a single figure discount, if needed 

If, during a price negotiation, you have the allowance to reduce the cost quoted to the client, never extend a discount range

For example, avoid statements like, “I can knock off the price by 10 or 15%.” Now, the client could have agreed on 10%, but the minute they know that 15% is also a possibility, why would they choose the former option? 

Avoid the in-between prices at all costs. Not only does this show a tad bit of desperation on your part, when it comes to closing the deal, the person on the other side might also think that you perhaps can go even lower.

Quote a single figure discount

4. Explain product value through numbers 

At the time of creating a sales plan, you must quantify your product’s worth and then use it to negotiate a better price. Through numbers, show your potential client what they can gain over a longer duration by investing in your offering now. 

Remember that the price is always tied to value, which is why it’s critical you take the negotiations beyond money. Once you use numbers to show your prospects the true value of your offering, their perception of your quote stands to change. 

Besides, salespeople often throw in a bunch of freebies, which they don’t talk about when explaining the price quoted. Ensure your prospect knows of the add-on services you are providing them.  

5. Take note of non-verbal cues 

If you think the art of negotiation lies in your words, think again! Non-verbal cues like your body language, tone of your voice, whether you shuddered or stuttered matter just as much. 

Exuding confidence is key while helming a sales negotiation. So, stay calm and patient while approaching your prospect, as they can see the chinks in your armor if you have any.

Try to think of yourself as a partner willing to provide services to the prospect. Firmly stand your ground during a negotiation. Remember, at this point, they are not your client, and you are equals to a large extent. 

Being too salesy or coming across as way too subservient will only invite the negotiating party to come on to you more aggressively. If you can, keep a check on your nerves. By doing this, you’d have won half the negotiation battle. 

6. Use prospect’s timeline as a negotiating tool 

Your prospects also have a deadline to close a contract, so they will play hardball only till it draws close. If you can gain a fair idea of what their timelines are, you can negotiate accordingly. Suppose they quote a counter price, which you are unhappy with, wait for some time, allow the timelines to skew in your favor, and then re-quote. 

Use prospect’s timeline as a negotiating tool

You’ll also have a deadline to close a deal. But, try to never let the prospect catch wind of it. Be careful while answering the potential client’s questions that hover around you, accidentally revealing your timeline. 

7. State requests in return for discounts 

It’s okay to build a give-and-take relationship with your prospect. In that spirit, ensure you make a few requests of your own in return for agreeing to the mutual price, which often is discounted from the original. Your demand could range from reducing the late delivery penalty to asking for specific datasets or assistance from the in-house staff.

Establishing a give-and-take relationship towards the end of negotiation might sound terse, but it often ends up building respect and trust between these two parties. 

If you and your client land on uneven footing, it’s hard to create a mutually beneficial working relationship for repeat business in the future. Simply put, you should also want to work with your client again, and this will only happen when working with each other is beneficial to both parties. 

And, believe it or not, the foundation of this philosophy is laid down during the time of negotiation. 

8. Know when to stop 

It’s understandable if you occasionally bend over backward to successfully close a negotiation but define your limits. 

If negotiations are invariably turning unreasonable with skimpy profit margins and a prospect unwilling to budge from their stance, respectfully walk away. In the long run, it’s better to find prospects who understand your product’s value and the price you were negotiating rather than working in an undervalued manner. 

A potential customer only willing to sign if you dramatically drop the price will have you scavenging for margins down the road. What’s also likely is that even after a long-drawn negotiation, they fail to see the advantages of your offering. In this case, it’s often challenging to satiate the client, which leads to them giving you negative reviews in the future. 

Why subject your sales and marketing professionals to a negotiation cycle you know won’t reap true rewards? Learn when to stop negotiating! 

How to negotiate over email? 

A common phenomenon that has come to life, thanks to the internet age, is email negotiation

After the first or second negotiation sessions in person, many prospects prefer coming to a consensus over email. So much so that a 2019 study by Adobe revealed that 1000 office workers in the USA spend a whopping 3.1 hours engaging with their work email inbox. Needless to say, many of these hours are consumed by negotiations. 

Indeed, if they are effective, emails can end up saving substantial travel time and effort to engage with a prospect. 

If, in your line of work, sales negotiations are commonplace after rolling out your email marketing campaign, you need these few nifty tips to negotiate over email. 

drips

1.     Meet face-to-face once 

All the technology in the world can’t replace the importance of a face-to-face meeting. But, most negotiators on both sides only need it once, which can also be done online. So, get on a video call, exchange pleasantries, talk about sending a quote over email, and begin negotiating on the same thread. 

2.     Avoid beating around the bush 

Just like you build an email marketing strategy for pitching products, build one for your negotiation emails. Know that negotiating over email is relatively different than negotiating in person. Here you get straight to the point, without indulging in any written small talk. 

Ditch questions like, “How was your weekend?” or “Is it raining there?” and elucidate what the email is all about. Also, before clicking send, read the body and the subject line fast and loud to make sure it doesn’t carry a negative tone. 

Here is an example template that gets straight to the point without sounding cold: 

 

Hi [First Name], 

Thanks for sharing your counteroffer on the custom quote we sent you last week. While we’re excited at the prospect of supplying you with the [Stipulated quantity] of [Product name], we also need to meet our sales margins. Presently, fulfilling the order at the price counter-quoted by you is a no-go for us.

However, we understand you also have a spend limit, which is why we are sharing a re-worked quotation with you. We reckon these prices would suit your budget. 

Please let us know your thoughts by Friday, so we can get our supply chain ready for timely delivery to your warehouse. 

Best,

[Your name], [Your position] at [Company name] 

3.     Explicitly state your thoughts and reflections 

Since this is not a face-to-face negotiation, the other party can take their sweet time replying. To shorten the lag of email turnaround, subtly provide them a deadline to accept your offer or revert with a counter. If you’re feeling impatient about your progress with a particular prospect, let them know. 

This deadline tactic is often a best practice for email marketers as it helps multiply conversions. They automate and deploy time-bound flash sales for 12-24 hours to get fast responses from prospects. The same can help you get quicker responses during email negotiations. 

Look at the email example below for further reference:  

 

Hi [First Name], 

We’re thrilled at the prospect of working with you. To quickly move along, we have attached a tailor-made quotation keeping your budget limitation in mind. Please let us know your thoughts on it before August 14th

Thanks,

[Your name], [Your position] at [Company name]  

4.     Engage prospects with relatable humor 

Just like physical negotiations have an element of humor, your emails must carry it too. Keeping a light and friendly tone while negotiating on price, the scope of work, or deliverables can boost trust between two parties as they get to know your personality a little.

We really like this humorous and light-hearted email template that uses a GIF from a popular sitcom to re-engage with an estranged client.

Engage prospects with relatable humor
Source: HubSpot

5.     Probe a problem 

Often during a written negotiation, you might sense a prospect’s reluctance to commit. Probe it further and counter it with a solution. Even if their issue is personal, for example, they are delaying signing the contract due to a family issue, provide them with more time and reconnect a bit later. 

In between, you can also check up on them over email and automate your follow-ups with Snov.io Email Drip Campaigns. 

All set to negotiate?

Don’t feel intimidated by an upcoming negotiation. Instead, follow these strategies to create a win-win situation for yourself and your company. Remember, professionals who master the skill of negotiation are 3 times more likely to achieve their pricing targets.

Lastly, whichever face-to-face or email negotiation tactic you use, always try to figure out your potential client’s true objections and expectations beforehand and also during the negotiation process.

You may not see it this way yet, but sales negotiation is actually a collaborative process with the other party — rather than you against them.

Leave a Reply

Your email address will not be published. Required fields are marked *